KBC Market Research Desk
KBC Bank
On Wednesday, the Polish zloty lagged behind its peers and fell by about 0.6% against the euro. Weaker than expected Polish labor market data could have partly contributed to the slide of the zloty. While employment for May came out in line with market expectations, the wage growth slightly disappointed as it reached “only” 3.2% Y/Y. On the other hand, the pace of growth is still quite strong, especially if we take into account that prices have been falling for the last eleven months (see the chart below).
Later today, the focus will be on another set of Polish data for May; namely, industrial production, construction and retail sales for May. The first figure may be of a particular interest as industrial production surprised quite significantly to the downside in April. We consider previous month’s result as a one-off blip and today’s figures could therefore in our view rather support the zloty.
Apart from Polish data, market will focus on the Euro group meeting on Greece. The comments from Greek policy makers of late suggest that chances on an agreement have become very slim. From this point of view, the risks for regional assets are clearly skewed to the downside despite generally positive spill-overs coming from yesterday’s FOMC meeting.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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